There is a famous legend about the compound interest effect. Indian King Shehan intends to reward Sass Bandal, the inventor of chess, because the clever minister's invention made the king's boring life full of infinite fun. The prime minister knelt before the king and said, "Your Majesty, please give me one grain of wheat in the first box/kloc-0, two grains in the second box and four grains in the third box. At this speed, each compartment will be twice as big as the previous one. Your Majesty, give me all the 64 grains of wheat like this on the chessboard to your servant! " When the king heard this, the reward was insignificant and he readily agreed. What was the result? If you want to count to sixty-four, even if you bring food from all over India, it will not be enough to fulfill your promise. Because according to the requirements of the Prime Minister, there are18446,744,073,709,5516 15 capsules, which is about 1845 billion capsules. What the Prime Minister wants is all the wheat produced in the world in 2000! This is the amazing effect of compound interest!
Let me talk about compound interest thinking first. Compound interest thinking means that doing A can produce a result B, which in turn can strengthen A's thing ... Applying the economist's formula, as long as R is positive, that is, as long as you do it right, time will bring miracles. This inevitably reminds me of "simple things should be done repeatedly" advocated by Yi Efficiency. Even if you concentrate on doing a small thing, doing it to the extreme will also create miracles.
Return to profitable thinking. Compound interest thinking is a very important way of thinking in our life. List some real compound interest stories in life for your better understanding.
A 76-year-old man, unlike other 70-year-olds, doesn't look 70 at first. A muscle, although not big, but the skin is not slack, very little body fat.
More importantly, Zhang Quantong told reporters:
"I haven't been sick since I was 30 years old, and I don't even have a basic cold."
How did you do that? Jogging for 2 kilometers and swimming for half an hour every day, even in winter.
"As long as the sea doesn't freeze, I'm not afraid of cold. Everyone else is wearing cotton-padded jackets. I only wore a pair of swimming trunks and jumped into the sea. "
It started from 3 1 year and lasted for 46 years. The return of this persistence is:
His physical quality and appearance look 20 years younger than his peers.
Health also has compound interest. If you exercise more than 20 minutes today, your body will get one point of exercise, which will further promote your work and exercise tomorrow.
In fact, health is really not difficult. Eat three meals a day normally, don't stay up late, work and rest regularly, and insist on jogging for half an hour every day. Is it difficult? Not difficult. You can make it with snacks.
Stick to it, and your body will repay you.
Lei's name was little known after he won the championship of CCTV's third season Chinese poetry conference on 20 18. His inspirational story tells everyone that anything is possible if you want!
When the reporter asked Lei, he thought that there must be a hundred times more efforts behind him than ordinary people. Other thunder has been insisting on it, and it has accumulated thousands of miles.
Reporter: "What is your daily routine? How can I read poetry? "
Lei Haiwei: "No matter how busy your work and life are, you still have to squeeze time." In fact, it takes a lot of time to send fragments, which is more suitable for reciting poems.
For example, when a merchant is waiting for a meal or a red light on the road. All this time can be used to recite poems. From 2: 30 to 4: 30 in the afternoon, I went back to my residence to change the battery, and after lunch, there was still more than an hour. There is plenty of time to sit down and read some poems. "
When waiting for dinner, waiting for the red light, and returning to the residence to change the battery, recite poems for an hour.
Is it difficult? It doesn't seem to be enough to burn the midnight oil. Bitter? In fact, it is the same as waiting for the red light to take the subway to see the mobile phone.
A takeaway brother defeated a master of Peking University by this one-hour reading accumulation.
This is the power of compound interest!
As Dong Qing said, "Any time you spend reading will be rewarded at some point."
There is a saying in the workplace called "emotional bank".
Today, you hurt a friend's interests, that is, you took money from the "emotional bank"; Today, you win by cooperating with your friends, that is, you put your money in the "emotional bank". "Emotional bank" is actually your personal information.
The "smile principle" put forward by Stephen ·JEM, a master of interpersonal relationship, tells us that when we go to work every morning and smile at every colleague, unexpected results will be achieved one year later. Why is this happening? Because the people you smile convey will spread a good impression on you and give you feedback on your behavior. For example, be more active when dealing with you, be more tolerant of your work and so on. This feedback will encourage you to smile more.
The ultimate reward of compound interest is that you will have your own image in the crowd, so that whenever someone mentions you, someone will immediately say, "He is really a good man!" " "
Suppose there are two companies now. In five years, Company A achieved a return of three years 100%, but lost 60% in two years. Company B is very stable, with an annual yield of about 15%. At first glance, the annualized rate of return of 100% is too attractive, while another increase of 15% feels too slow. In actual calculation, the difference comes out.
Company A has a three-year interest 100% and a two-year loss of 60%.
Income = a (1+100%) 3× (1-60%) 2 =1.28a.
It is equivalent to (1+5%) 5 = 1.276, that is, the annualized compound income of Company A is actually 5%, which is far lower than the yield of Company B 15%.
The compound interest effect is not afraid of low starting point and slow progress, and it is afraid of instability.
1.0 1^365=37.78
0.99^365=0.025
What are the meanings of these two formulas?
The first formula tells us that the progress of 1% every day is 37.78 times after one year.
The second formula tells us that if we return to 1% every day, it will almost return to zero after one year!
Life is a marathon, and you won't win at the starting point. Don't underestimate this 1%. The compound interest effect tells us that 1% can have a wonderful life. Now, starting from 1%, we should establish the compound interest thinking in our life.
Finally, to quote Buffett's words-"Life is like a snowball, the key is to find enough wet snow and long slopes."